The broader economic era of prolonged stagnation after Japan’s 1989 stock-market crash was called the Lost Decade.
Japan’s asset bubble burst after the Nikkei 225 peaked in December 1989 and property prices began falling. Banks were left with large portfolios of bad loans, while companies and households reduced borrowing and investment. These forces weakened demand and made recovery unusually slow.
“Lost Decade” commonly refers to the 1990s, although some economists use the term more broadly for Japan’s stagnation through the 1990s and 2000s. The period included low growth, deflationary pressure, banking problems, and repeated fiscal and monetary responses. It was not a single uninterrupted recession, but a long period in which economic performance remained below earlier expectations.
The expression should not be mistaken for the name of the stock-market crash itself. The crash was the collapse in asset prices; the Lost Decade describes the extended economic aftermath. Japan’s experience later became a reference point in discussions of debt, deflation, and post-bubble recoveries.